Goldman Sachs, Morgan Stanley, Barclays Capital and JP Morgan have originated as most active dealers of derivatives linked to California’s bonds in recent months, The Wall Street Journal reports. In March 2011, California Treasurer, Bill Lockyer, asked all 86 of the state’s bond underwriters to detail the volume of credit default swaps they traded on the state’s roughly $80 billion of general obligation bonds in the three months ending January 31. Bank of America and Morgan Stanley both sold more protection on California debt than they had bought, while JP Morgan bought more CDS protection than it sold. Barclays reported $10 million of trades from December to February and Citigroup reported $30 million of trades from Nov. 1 through Feb. 28.
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